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US Government Shutdown Derailed Bitcoin ETF Talks, Says VanEck CEO

A closely-watched proposal to list a bitcoin exchange-traded fund on the
Cboe BZX Exchange was withdrawn Wednesday – and the ongoing partial
shutdown of the U.S. government appears to be to blame.

As CoinDesk reported, the filing was “temporarily withdrawn”, according
to VanEck VanEck director of digital asset strategy Gabor Gurbacs. He
also said that “we are actively working with regulators and major market
participants to build appropriate market structure frameworks for a
Bitcoin ETF and digital assets in general.”

But Jan van Eck, the chief executive officer of VanEck, indicated on
CNBC Wednesday that the shutdown’s impact on the Securities and Exchange
Commission (SEC) hampered the process between regulators and those
seeking the ETF’s approval. According to van Eck, the discussions around
the proposal – initially submitted last June and subject to subsequent
approval delays – “had to stop.”

Speaking to CNBC’s Bob Pisani, van Eck explained:

Pressed by Pisani on whether the proposal would have been rejected
anyway due to concerns about custody and bitcoin’s pricing, van Eck
added that “we think we actually have pretty solid answers to those
[questions], but we just need to really demonstrate it very, very
clearly and convincingly to the regulators.”
“We were trying to do that but we obviously can’t have meetings while they’re shut down,” he added.

Jake Chervinsky, a lawyer with Kobre & Kim, told CoinDesk that, in
his view, that “the ETF sponsors made the right decision to withdraw
their proposal,” going on to note that “the shutdown was the final nail
in the ETF’s coffin, since the SEC doesn’t have enough staff members
available to review or approve any proposed rule changes right now.”

“Withdrawing the proposal stops the SEC from issuing another order
saying the bitcoin markets aren’t ready for an ETF. The decision to
withdraw is a decision to ‘live to fight another day’ – Jan Van Eck has
said he will re-file the proposal after the shutdown, so he probably
wanted to avoid setting a new precedent that would make it harder to
succeed in the future,” Chervinsky wrote in an email.

The partial shutdown, which affects a number of government departments
including the U.S. Treasury (of which the SEC is a part), began on Dec.
22 following disagreements over the funding of a proposed wall on the
U.S.-Mexico border sought by U.S. President Donald Trump. It is the
longest government shutdown in U.S. history.

Caught in the crossfire of the shutdown are a number of other projects
in the crypto space, including bitcoin futures platform Bakkt and crypto
trading platform ErisX, both of which are waiting for the Commodity
Futures Exchange Commission – an independent U.S. agency that has also
been affected by the funding lapse – for approvals.https://www.geezgo.com/sps/52851